Depending upon state law, a life insurance trust can last as long as any other trust, including dynasty trusts. If the ILIT is a dynasty-type ILIT, it will be subject to generation-skipping transfer taxes as discussed in Chapter 4. However, your generation skipping transfer tax exemption can be applied against the amount contributed to the ILIT, not against the death proceeds of the insurance policy purchased by the ILIT. The ability to purchase life insurance inside of a dynasty ILIT provides significant leverage for the use of the generation skipping transfer tax exemption.